21 March 2016

ECB: Capital Markets Union and the European monetary and financial framework

Keynote speech by Vítor Constâncio, Vice-President of the ECB, at Chatham House, London

Mr. Constâncio explained how CMU has the potential to facilitate central banking tasks and thus to benefit Monetary and Economic Union.

The Commission initiated the legislative work on CMU by making proposals including creating a framework for simple, transparent and standardised (STS) securitisation. European Central Bank (ECB) supports this work, and call on the co-legislators to make swift progress in the adoption of these proposals.

To achieve CMU and reap the potential benefits ECB will need to promote further harmonisation in areas that have so far been considered as long-term issues.

CMU should be seen as a “structural reform” by which the legislators and policy makers at the EU and national level, but also market participants themselves, dismantle existing barriers to the cross-border functioning of the single market in capital. In this regard, tackling differences in insolvency law, taxation and company law will be highly relevant. As long as these obstacles remain, there will be no cross-border capital markets union.

Lastly, if CMU is successful in deepening and integrating capital markets, this development will need to be accompanied by macroprudential supervision to ensure that the potential new risks are limited.

Full speech

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